UA-R-GC-1914-01-01-1986-05_Page-013

- 2 - of Egyptian intelligence. We are in regular touch with Egyptian security for this purpose. There is also a longer run perspective to consider. Egypt has had some 10 years of reasonably good economic growth. Now, however, the country is headed for several lean years. Oil revenues, repatriation of earnings, Suez eanal tolls . , and now tourism are all down at the same time. The balance of payments is negative, debt ratios are considerable, inflation - in imported goods at least - is likely to increase, and the value of the pound continues to drop. The result will have to be reduced consumer imports, higher prices, and a squeeze on the segment of the population most supportive of the government. How this will affect Egyptian political life remains to be seen. My own view, though opinions differ, is that "fundamental­ism", while continuing to grow, is not and will not be a dominant force. Successive governments, including Nasser's,have successfully kept it in bounds over many years. The reassertion of Islamic values will continue, but the political system undoubtedly will reflect a wide variety of considerations, as it now does. The economic slow-down is likely, it seems to me, to be more stressful. Educated Egyptians are already well aware that the next few years will be tight. But as this happens the internal debate over economic policy is likely to intensify, and in Egypt's increasingly democratic environment the debate could be sharp. One would hope that the course of economic liberalism that Egypt has adopted and has, somewhat fitfully, sought to pursue will not be deflected by these strains. But that will be under attack. The steadiness of American support may be an important factor in ensuring continuity of present economic directions. For AUe the results of the tightening economy will be a slow-down in fund raising in Egypt, resistance to 'continuing high leve~ of tuition increase, rising costs of imported goods, reduction in western consumer goods in the local market that our faculty want, and pressures on our operating budget. As far as AUe's status in Egypt is concerned I foresee no changes of orientation, if there should be any at all, that would be likely to cause us problems. As mng as AUe stays out of politics, and we work hard to be sure we do, the important contritution we make to Egypt will remain well enough understood to provide the University with firm local support. So you can see that while I think the next few years will not be as good as the last few and that we will have to be alert I am not at all pessimistic